The Stanford Center on Poverty and Inequality launched today a new $3 million partnership with Third Sector Capital Partners, the Social Innovation Fund, The Ballmer Group, and the White House Office of Social Innovation to build an administrative-data framework for measuring and evaluating the success of social service programs designed to reduce poverty and inequality.

A $1.5 million grant was awarded by the Social Innovation Fund (SIF), a program of the Corporation for National and Community Service, after a rigorous nationwide competition. The SIF funds will be matched by a $1.5 million contribution from The Ballmer Group.

The award was announced today at a White House event with President Obama in Pittsburgh, PA. Speaking at the event, Stanford professor Raj Chetty emphasized the importance of harnessing the power of big data to reduce poverty and increase opportunity.

“If we hope to secure the core American principle of equal opportunity, we need rigorous evidence-based innovation,” said Chetty, a principal investigator in the new partnership. “We are committed to building an infrastructure that will allow us to make smart investments in data-based solutions.”

The new infrastructure links administrative tax data with Census data and will allow social policy innovators to avoid the well-known problems that plague survey-based assessments. In collaboration with researchers at the Center on Poverty and Inequality, service providers will be able to monitor not just the immediate effects of their programs but also the long-run effects as well as effects on children.

“Science and technology can do more than just grow the economy,” said David Grusky, Director of theStanford Center on Poverty and Inequality and another principal investigator for the new grant. “It can also give us big-data tools, a commitment to rapid testing and results-based policy, and perhaps most importantly a new entrepreneurial spirit to the problem of reducing poverty. At Stanford University, that’s exactly what the Center on Poverty and Inequality is doing. It’s bringing together the country’s best minds in science, technology, service, and government to build a 21st century infrastructure for solving poverty, reducing inequality, and increasing mobility.”

In addition to building out the new infrastructure for measuring results, the Center on Poverty and Inequality and Third Sector will award three grants to Pay for Success providers focusing on projects that provide economic opportunity.

Pay for Success is a new model for funding social services, in which government funds policy innovations only if these programs deliver on their stated outcomes. Often, impact investors finance the upfront costs of service delivery. This spreads the risk between government and the private sector and protects taxpayers from paying for programs that don’t work. In 2014, the Social Innovation Fund reinforced its commitment to support innovative solutions and change how public and private sector investors allocate philanthropic resources by launching its SIF Pay for Success program. This $30-plus million grantmaking initiative was designed to help cities, states, and nonprofits develop PFS projects, which tie funding for social services to its true impact in the community.

The Center on Poverty and Inequality and Third Sector will focus primarily on funding Pay for Success Projects in California, Oregon, and Washington. There is a particularly pressing need for Pay for Success projects in California, which has an SPM poverty rate of 21%, the highest in the country.

"Third Sector is excited to partner with Stanford on driving the use of data to support impactful programs in our most vulnerable communities. This partnership will streamline access to critical outcomes data for communities, and help us to deploy that data to underwrite outcomes-oriented projects across the West Coast," said Caroline Whistler, president and co-founder of Third Sector Capital Partners, which is one of the pioneers of the Pay for Success field. "This grant from the Social Innovation Fund is crucial to our effort and we are grateful for their continued support of the expansion of data driven social programming."

“The Obama Administration supports Pay for Success because it is advancing proven, data-driven solutions that are getting better results for communities in need,” said David Wilkinson, Director of the White House Office of Social Innovation. “Stanford and Third Sector have been selected to do groundbreaking work, helping communities use data and implement better, more effective solutions. The White House applauds the Stanford Center on Poverty and Inequality, Third Sector, and the Social Innovation Fund for advancing innovative approaches to measurably improve opportunity and equality.”

In the next several months, Third Sector Capital Partners will hold an open competition to select organizations engaged in PFS activity to receive training and technical assistance of at least $100,000 for periods of three years to centralize its administrative data access function. If you are interested in learning more, please visit http://www.thirdsectorcap.org/pay-for-success-administrative-data-pilot

###

The Social Innovation Fund (SIF) is a program of the Corporation for National and Community Service, a federal agency that engages millions of Americans in service through its AmeriCorps, Senior Corps, and Volunteer Generation Fund programs, and leads the President's national call to service initiative, United We Serve. Created in 2009, the SIF has grown into nearly a $1 billion social impact incubator within the federal government, creating more than 450 public-private partnerships that deliver high-impact, community-based solutions that work. The SIF empowers organizations to identify and support sustainable solutions that are already making a significant impact in transforming communities. For more information, visit nationalservice.gov

###

The Stanford Center on Poverty and Inequality is a nonpartisan research center dedicated to monitoring trends in poverty and inequality, explaining what’s driving those trends, and developing science-based policy on poverty and inequality. The Center supports research by new and established scholars, trains the next generation of scholars and policy analysts, and disseminates the very best research on poverty and inequality. For more information, visit inequality.stanford.edu.

###

Third Sector leads governments, high-performing nonprofits, and private funders in building evidence-based initiatives that address society’s most persistent challenges. As experts in innovative public-private contracting and financing strategies, Third Sector is an architect and builder of the nation’s most promising Pay for Success projects including those in Commonwealth of Massachusetts, Cuyahoga County, Ohio, and Santa Clara County, California. These projects are rewriting the book on how governments contract for social services: funding programs that work to measurably improve the lives of people most in need while saving taxpayer dollars. A 501(c)(3) nonprofit based in Boston and San Francisco, Third Sector is supported through philanthropic and government sources, including a grant from the Corporation for National and Community Service’s Social Innovation Fund.

Social Impact Bond Review

Resource for those interested in Pay for Success finance. The site maintains up-to-date news and media mentions, a 'Practitioner's Toolkit', general resources, PFS activity trackers, and other information.

Subscribe

A weekly newsletter that recaps Pay for Success, Social Impact Bond, and other relevant news.